The brief provides an overview of tobacco control legislation, use, and taxation in the country. Uzbekistan conducts a rather comprehensive tobacco control policy in recent years. In October 2011, the President of Uzbekistan signed a law "On the restriction...
See More +The brief provides an overview of tobacco control legislation, use, and taxation in the country. Uzbekistan conducts a rather comprehensive tobacco control policy in recent years. In October 2011, the President of Uzbekistan signed a law "On the restriction of distribution and consumption of alcohol and tobacco products". In 2012, Uzbekistan Republic ratified the World Health Organization Framework Convention on Tobacco Control (FCTC). In 2010-2013, cigarette excise rates were increased by 20-25 percent every year. In 2014-2017, the average annual increase of cigarette specific excise rates was 30 percent. Such taxation policy had beneficial results: (1) Tobacco excise revenue in 2010-2017 increased more than 3-fold in real (inflation-adjusted) terms; (2) Annual cigarette sales in 2010-2017 decreased by 33 percent, or by 5 billion cigarettes; (3) Estimated cigarette smuggling into the country substantially decreased. Cigarette prices in 2010-2018 increased by 450 percent in nominal terms, but it was caused not only by taxation, as tobacco industry also increased its (net-of-tax) part of the price well above the inflation to secure its profits on declining cigarette market in Uzbekistan. In 2018, the cigarette excise tax was increased by 120 percent, but cigarette prices increased only by 28 percent as excise tax was less than 30 percent of the cigarette retail price. In 2019, the specific excise rate was further increased by 40 percent from January and by 20 percent from July, and an additional small ad valorem excise was introduced. Despite the excise hikes of 2018 and 2019, cigarette excise taxes in Uzbekistan are still lower than in most neighboring countries. So, there is a great potential for a further excise rate increase. The following recommendations could provide both public health and fiscal benefits for Uzbekistan: Annually increase specific excise rate for cigarettes by at least 50 percent annually. Increase ad valorem excise rate to at least 10 percent of the final retail price. Special policies aiming to discourage nasway use should be implemented in Uzbekistan, while the introduction of excise or other taxes for such a home-made product can hardly produce substantial benefits. It is worth considering excise taxation for electronic cigarette liquids and devices in line with the World Bank recommendations. Effective policies to counteract tobacco smuggling into and out of the country should be implemented in line with provisions of the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products, which is recommended to be ratified by the country.
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